Frequently Asked Questions

Is there a minimum investment for your funds?

North Growth non-prospectus funds, units of which are available pursuant to exemptions from the registration and prospectus requirements of the provincial securities Acts, all require a minimum initial investment of $150,000. The funds are the North Growth US Equity Fund, the North Growth Canadian Equity Fund and the North Growth Money Market Fund.

The North Growth US Equity Advisor Fund, units of which are available under the prospectus requirements of the provincial securities Acts, is available only through dealers and requires a minimum initial investment of $5,000.

What's the difference between the North Growth US Equity Fund in Canadian dollars and the North Growth US Equity Fund in US dollars?

There is no difference.

There is only one NGM US Equity Fund. Clients can subscribe to or redeem units of the fund in US or in Canadian dollars. Each unit of the fund has a US dollar value and a corresponding Canadian dollar value. The apparent difference in performance between the two is attributed to fluctuating foreign exchange rates.

Are your funds RRSP eligible?

Yes, with the removal of the foreign content rules all of our funds are RRSP eligible.

Why own US Equities?

There are several reasons. In addition to the US having the largest economy and equity market in the world, the US market is:

  • Extremely dynamic
  • A leader in technological innovation and business trends
  • Unmatched in choice of industries and the size of its players
  • Very resilient to short-term corrections and bear markets

Equities have been the best securities investment in the US in every decade except the 1930s.

Is the NGM US Equity Fund a small- to mid-cap fund?

Although the fund is not focused strictly on small- to mid-cap stocks it has significant representation in those areas.

The primary focus of the fund is potential high-growth investments regardless of capitalization size. We base our assessment for high-growth on a company’s underlying business characteristics and determine if its stock is undervalued in the market.

Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09
Definitions: Large Cap greater than $10 billion; Mid Cap between $2 billion and $10 billion; Small Cap less than $2 billion
Large Cap 25.7% 19.9% 5.2% 9.1% 22.1% 40.1% 55.6% 60.3% 74.3% 77.2% 75.0% 72.2%
Mid Cap 15.1% 22.6% 41.1% 33.9% 29.6% 31.0% 25.0% 22.4% 12.3% 11.5% 16.4% 18.0%
Small Cap 50.8% 26.8% 21.8% 20.2% 44.6% 26.7% 17.9% 15.2% 12.1% 10.1% 8.1% 9.5%
Cash 8.4% 30.7% 32.0% 36.9% 3.7% 2.3% 1.5% 2.1% 1.3% 1.1% 0.4% 0.3%

Because the NGM US Equity Fund is relatively small, our managers have the flexibility to invest in very small-cap stocks as well as very-large ones. Managers of very large funds don’t have this freedom. This flexibility gives us an advantage. We can invest in high-growth companies of all capitalization sizes, even micro-cap stocks, although it’s rare.

Do you issue unit or share certificates?

Shares and unit certificates are not issued.

But units of the funds can be used as bank-collateral two ways:

  • Registering units in the bank’s name in trust for the unitholder.
  • The bank accepts an undertaking by North Growth Management Ltd.

How is the US Equity Fund taxed?

Yearly capital gains made in the North Growth Equity Fund are allocated to unitholders pro rata at year end. T3 forms are issued stating the amount of capital gains unitholders must declare on their tax returns.

If the fund earns interest income throughout the year, it’s also allocated and stated on the unitholder’s T3 form.

Please get in touch with us for more detailed information.

Disclaimer: This summary is not, and is not intended to be, tax advice to any particular individual. Please seek tax advice from your tax professional.

Are there trading restrictions in place for North Growth employees?

We have a company policy that our employees are required to do all their US and Canadian investing through mutual or pooled funds, North Growth’s own, if possible. This is a zero tolerance policy.

Our employees are also required to disclose all their equity trading transactions every month other than mutual/pooled fund transactions or investments in private companies.

Who are North Growth's Trustees and Auditors?

RBC Dexia Investor Services Trust is North Growth’s trustee company. Deloitte & Touche is our auditor.

Canadian Western Trust is the Trustee for NGM RRSP and RRIF accounts.

Is there an advantage to holding Canadian trust portfolio units of US stocks versus holding the US stocks directly?

Yes. Units in Canadian trust portfolios are not subject to US succession duties. Holding US stocks directly are considered ‘American assets’ and are subject to succession duties upon your death. These duties can be very high, 55% for wealthy individuals. Each state collects these duties at varying rates. Your succession duties are determined by where your stocks are domiciled.

Canada doesn’t have succession rates. But the government considers capital gains on Canadian trust units as disposed when you pass away unless you’ve made spousal arrangements.

Disclaimer: This summary is not, and is not intended to be, tax advice to any particular individual. Please seek tax advice from your tax professional.

Are there any restrictions on the types of investments that the NGM US Equity Fund makes?

There are a few strict rules for our funds:

  • North Growth will not borrow money to make investments
  • We will not use options or future contracts
  • We will not invest in tobacco company stocks

Can you recommend a website for information on investment and mutual fund terminology?

Globefund's glossary of mutual fund terms is very useful.

Your question not on our list? Just ASK NGM.